* Dollar supported by U.S. jobs data, risk mood souring
* Dollar could snap seven-week losing streak
* Yen headed for worst week in two months after U.S. yields
jump
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Aug 14 (Reuters) - The dollar drifted higher on
Friday, helped by strong U.S. jobs data as well as firmer global
demand for safe-havens amid concerns about the coronavirus
recovery, setting the currency up to potentially snap a
seven-week losing streak.
Soft Chinese retail and production figures cast a pall over
the mood in Asia, dragging on the risk-sensitive Australian and
New Zealand dollars.
The Aussie AUD=D3 was last 0.2% softer at $0.7138 and has
settled in to a range around that level after pulling back from
a 18-month high hit a week ago. AUD/
The kiwi NZD=D3 was under pressure at $0.6537 as the
country also faces a fresh COVID-19 outbreak and after dovish
comments from the central bank this week. Other majors were
mostly flat, but the euro EUR=EBS hovered above $1.18.
"Risk sentiment is slowing down," said Westpac FX analyst
Imre Speizer. "It's too early to say the whole (dollar)
downtrend is over...but it's got potential and at the very least
it's putting a cap on the Aussie and kiwi."
China's industrial output rose more slowly than expected in
July and retail sales fell for a seventh straight month,
suggesting some bumps in even the world's most promising
rebound. Troubling signs also emerged on the health front in Asia,
with a dozen new cases in New Zealand - which is considering
whether to ease or extend its lockdown of Auckland - and the
biggest daily jump in new cases in South Korea since March.
Overnight the weekly number of applications for unemployment
benefits in the United States dropped below one million for the
first time since the start of the pandemic, with 963,000 claims
coming in below expectations for 1.1 million. But beyond buoying the dollar any relief was shortlived, as
some 30 million Americans are out of work and an aid package to
keep stimulus flowing in the economy has stalled in Congress.
Against a basket of currencies =USD the dollar remains
0.1% lower for the week, but it has appeared to arrest a slide
that has it about 9.5% below its March peak.
YEN DROPS
This week has also been a bad one for the Japanese yen,
which is headed for its biggest weekly drop against the dollar
in two months as a jump in U.S. yields has attracted flows from
Japan.
Benchmark U.S. 10-year yields US10YT=RR are up nearly 15
basis points this week, the sharpest jump since early June, as
the U.S. Treasury flooded the market with supply and as some
investors grew more positive about the long-term outlook. US/
The yen JPY= was steady on the dollar at 106.94 in morning
trade and is a little less than 1% softer for the week.
"After threatening to break lower towards the end of last
month, dollar/yen has moved back within the 106.00 to 108.00
range which has held for the most part since April," said MUFG
currency analyst Lee Hardman.
"The yen has been undermined in part by the ongoing
improvement in global investor risk sentiment," he said.
The move is also broad, with the yen down 1.2% this week to
an almost two-year low against the Swiss franc JPYCHF=R and
falling more than 1% to multi-month lows against the euro
EURJPY=R and pound GBPJPY=R .
That is welcome in Japan, where it benefits exporters which
has helped propel the Nikkei stock index .N225 to a six month
peak this week. .T
Elsewhere the pound GBP=D3 was marginally weaker at
$1.3055.
On the data schedule later today are preliminary European
employment and GDP numbers, as well as U.S. retail sales
figures, with investors likely to focus on any signs of
divergence between the U.S. and European recoveries.